Fresh finance support scheme for COVID-hit SMEs

Thursday, 20 August 2020 03:43 - - {{hitsCtrl.values.hits}}

Finance Ministry considering fresh working capital support ranging from Rs. 100,000 to Rs. 10 m

By Charumini de Silva

The Finance Ministry is to introduce a new financial support scheme to small and medium enterprises (SMEs) to tide over difficulties arising from the COVID-19 pandemic.

“The Treasury has identified that there are SMEs needing capital to continue their businesses. The new scheme is focused on providing a working capital ranging from Rs. 100,000 to Rs. 10 million to the SMEs negatively impacted by COVID-19,” Finance Ministry Development Finance Department Director General Geetha Wimalaweera told a meeting of all stakeholders of the tourism industry on Tuesday.

Noting that the scheme is available for entities and individuals engaged in the tourism industry, she said specific details will be made public once the new support scheme is finalised.

This support is in addition to the Saubagya COVID-19 Renaissance Loan Scheme, which was introduced by the Central Bank in consultation with the Government to provide working capital loans at 4% interest rates to businesses adversely affected by the COVID-19 outbreak through licensed banks, thereby supporting the revival of economic activity in the country. This loan scheme is available for COVID-19 affected businesses with an annual turnover below Rs. 1 billion, including self-employment and individuals. The Rs. 1 billion limit of annual turnover will not be applicable to businesses engaged in tourism, exports, and related logistical supplies.

Businesses and individuals affected by the pandemic can submit their loan applications under the Saubagya COVID-19 Renaissance Loan Scheme to their respective banks until 31 August 2020.

According to the latest data, the Central Bank approved 22,306 loans amounting to Rs. 60,250 million under the Saubagya COVID-19 renaissance facility as of 10 July 2020, with the approval given for 2,066 new loans, amounting to Rs. 6,978 million during the week ended on 10 July 2020. The licensed banks had already disbursed Rs. 30,528 million among 13,333 borrowers islandwide as of 9 July 2020.